FX.co ★ India's Fiscal Gap Narrows in April-May

In the initial two months of the fiscal year 2025-2026, India reported a fiscal deficit of INR 0.13 trillion, significantly reduced from INR 0.51 trillion recorded during the same timeframe the previous year. This marks 0.8% of the government's comprehensive annual target, a notable decrease from last year's 3.1%. Total government receipts saw a substantial increase of 28.0% year-over-year, amounting to INR 7.33 trillion, which constitutes 21.0% of the yearly goal, with net tax revenues contributing INR 3.51 trillion. Concurrently, total governmental expenditures ascended by 19.7%, reaching INR 7.46 trillion or 14.7% of the annual target. Of particular note, capital expenditure, predominantly allocated to infrastructure development, achieved 19.7% of its annual target. The government is strategically targeting a reduction of the fiscal deficit to 4.4% of GDP for the FY2025-26, compared to the previous fiscal year’s 4.8%.